陈宪：面对疫情，上海这个新经济表现抢眼，背后有哪些独特优势在支撑？ - 2020-08-25

Chen Xian, Professor, Antai College of Economics and Management, Shanghai Jiao Tong University
It is a big surprise to observe that the Shanghai economy has recovered rapidly with vigor and vitality after resumption of work and production during the epidemic, and the result is evidenced by statistics. Among economic activities in Shanghai, online new economy is the most active, eye-catching one. Three unique advantages labeled as scale, ecology and culture respectively can be found in Shanghai’s online new economy development, which is illustrated below.
Both market demand and supply capacity have scale advantage.
Firstly, both market demand and supply capacity have scale advantage. Market demand reflects the purchasing power of people, which can be measured by the money held by them. The purchasing power shown in Shanghai’s online and offline markets can be illustrated by one indication, namely higher proportion of middle-income group in total population. Reports on Shanghai People’s Living and Public Opinions (Income & Consumption) 2016, issued by Institute of Sociology, Shanghai Academy of Social Sciences, shows that the household consumption of over 84.2% families have reached the level of “well-off” or above. As per the investigation, people with personal annual income of no more than 50,000 yuan are around 29.70%; people with personal annual income ranging between 51.000 to 70,000 yuan are around 30.60%; and people with personal annual income of higher than 100,000 yuan are around 14.40%. Such figures mean that people with personal annual income ranging between 51.000 to 100,000 yuan are around 70%, i.e. people with middle income or above are the majority of total population in Shanghai. These figures were collected 4 years ago and the scenario today should be better anyway. Consumption is a function of income, and such scale of people with middle income or above explains the demand side of Shanghai’s online new economy.
In the meanwhile, the epidemic has witnessed the surge of demands for online medical inquiry and distance medical treatment in Shanghai. Online voluntary clinics launched by Ali Health has received inquiries from 2.8 million users since the start of year 2020; online education and digital entertainment regained popularity, for instance, Bilibili, a leading online entertainment platform for young generations in China, expected an increase of revenue by 118% in Q1 of 2020, while Ximalaya, an audio sharing platform, reported an increase by 32% in Q1 of 2020; Fresh food E-commerce demands are huge, for instance, Dingdong Maicai delivered 4 million orders during the 7-day Chinese Spring Festival; Huawei’s distance work business has increased by 80%, rendering services for 300,000 workers from 40.000 businesses and organizations in Shanghai.
According to the White Paper on China’s Digital Economy Development and Employment issued by China Academy of Information and Communications Technology (CAICT) in 2018 and 2019, in 2017, there were only three provinces with digital economy contributing over 40% to local GDP across China, namely Beijing, Shanghai and Guangdong. In 2018, digital economy played dominating role in Beijing and Shanghai, where digital economy contributed over 50% to local GDP. As per Statistics on National Economy and Social Development in Shanghai 2019, the value of information industry increased by 409, 460 million yuan all year round in 2019, a year-on-year increase of 10.1%. Information service industry contributed 286,312 million yuan to the total value, a year-on-year increase of 15%. Shanghai took the lead in launching connectivity for trans-province 5G video call service across the country, completed construction of 16,672 5G outdoor macro base stations and 14,614 5G indoor micro base stations, and realized 5G full coverage in central urban areas and key areas in outskirts. The model of 5G applications in specific industries have driven the integrated development of chains for 5G industries, businesses and innovations, and 234 5G applications have been implemented in ten areas including smart manufacturing, healthcare and intelligent education. Such projects and relevant statistics represent the supply side of Shanghai’s online new economy for today and future.
Ecology for innovations and industries has boosted the success ratio of online new economy.
Secondly, ecology advantage has provided support for innovation, industry, market and talents. The concept of ecology in nature is borrowed to describe innovation and industry development, and the idea is to highlight that these elements share the similar paradigm of self-regulating function in rainforests. Such paradigm bears the features of diversity, openness, self-organization and dynamics. Under the umbrella of innovation or industry ecology, various “species” live together and new “species” may come into being, i.e. new technology innovation, products and services, industries and businesses may emerge. Online new economy is a new “species group”. Ecology for innovations and industries in Shanghai has boosted the success ratio of such “species group”, which creates privileged conditions for the robust growth of online new economy in Shanghai.
Ecology advantage is mainly reflected in various support for the development of online new economy. As a pilot city for China’s industrial Internet innovation and development, since 2017, Shanghai has made industrial Internet its strategic option in boosting the branding of “Made in Shanghai”, facilitating quality development of industry and promoting the construction of manufacturing power, and many explorations and practices have been conducted. On the list of Top 100 Internet Companies in China, 19 companies are based in Shanghai, the second largest hub of Internet companies. Among China’s top 10 Internet companies with the largest market capitalization，2 are based in Shanghai, of which Pinduoduo ranges top 4. In recent years, emerging cultural industries based on digital technology are rapidly rising in Shanghai. Cultural industry has demonstrated trends in yearning for content, mobility, intelligence and integration, and the creation and production of cultural content has become one of the core competitivenesses in the industry.
The construction of market systems represented by financial market system in Shanghai has made great progress in recent years. Shanghai has become one of the cities with the most financial market categories in the world. Shanghai has further broadened the openness of its financial market to the world, enhancing its international influence. Fully utilizing its advantages in sound financial infrastructure, financial institution clusters, abundant hi-tech enterprises and situational applications, Shanghai has been vigorously making online financial service innovation by fin-tech.
Talents and startups are both subjects of innovation and industry ecology, and their numbers and quality are decisive for the development level of innovation and industry ecology. Shanghai already has huge storage of talents, and many more graduates will stay in or come to Shanghai for work every year. In particular, it is worth mentioning that Shanghai is one of the cities with most attractiveness to overseas talents in China.
May 5 Shopping Festival reflects the characteristics and effects of Shanghai Style Culture.
Lastly, Shanghai urban culture, including Shanghai Style Culture, provides cultural support for the development of online new economy. Online new economy has close relationship with digital economy on the one hand, it blends with cultural and fashion elements on the other hand. Characteristics of Shanghai Style Culture, namely openness, innovation and diversity, bring momentum and power to the development of online new economy and create inclusive environment. This is another privileged advantage of Shanghai.
Launch of May 5 Shopping Festival is further innovation on basis of Shanghai’s recent efforts in building itself the hub of new retail and new consumption. The online and offline consumer flow-guiding model initiated by May 5 Shopping Festival, Pinduoduo’s facilitating online consumption flow generation for offline shops, as well as online food ordering platform Eleme’s help for local time-honored food brands and mid-high end fresh food service enterprises with digital operation development, are all practical initiative to boom integrated online-offline development. These innovations brought along by May 5 Shopping Festival will surely spark the new engine driving Shanghai’s economic growth, carrying forward Shanghai’s online new economy.
The ongoing activity series titled May 5 Shopping Festival & Quality Life Livestreaming Show Week, integrating various fashion elements in livestreaming shows, shop discovery and promotions, have spurred people’s imagination of and demand for life quality. The Quality Life Livestreaming Show Week has promoted shopping and consumption activities with starting point in cultural consumption, a vivid demonstration of Shanghai Style Culture’s characteristics and effects. With increasing per capita dispensable income in Shanghai, the consumption manner will change dramatically in many ways. The single pursuit of brand, profile, function and cost-efficiency in goods and services will transform and develop into the pursuit of lifestyles focusing on experience of demand and cultural value, and this will be the trend after the epidemic. Online new economy blended with cultural elements will play an important role in such transformation and promotion.